Abstract Immortalized differentiated liver cell lines capable of continuous proliferation, and expressing stable liver-specific functions, would be valuable for in vitro toxicity testing in the pharmaceutical, chemical, food and cosmetics industries. Immortalized rat hepatocyte cell lines have been produced by transfection of SV40 DNA by electroporation or calcium phosphate precipitation. Their utility has been assessed by studying the toxicity of a model compound, menadione, and by measuring the activities of DT-diaphorase and NADPH cytochrome c reductase. Enzyme activities and toxicity were compared in freshly isolated hepatocytes, the immortalized cell lines and dedifferentiated HTC hepatoma cells. In HTC cells DT-diaphorase activity was 100-fold elevated compared with freshly isolated hepatocytes. In only one cell line, C2.1.2. (produced by calcium phosphate precipitation), was DT-diaphorase activity increased (twofold) compared with freshly isolated hepatocytes. Menadione caused loss of viability at similar concentrations (40–80 μm) in the immortalized cell lines and 24-hr primary cultures of hepatocytes, whereas HTC cells showed loss of viability only with menadione concentrations above 200 μm. The immortalized lines therefore appear to have potential for predicting toxicity and for menadione this can be correlated with the expression of DT-diaphorase.